Follow-Through For Now
Quarter-end window dressing and portfolio rebalancing provided several good
trends today
in the Nasdaq. From the open, the index rallied slightly, and then headed toward
the lows in
a measured move. Following a rally, the $COMPX found its ultimate lows
near the 2nd
volatility band (on the $NDX) and shot up to green in a hurry. The action has
the Nasdaq composite
closing in a cup and handle pattern.
While this pattern is better known as an intermediate-term pattern, the fact
is, it works in any time
frame. The handle tends to shake out weak hands, preparing for a rally above the
lip of the cup.
If the rally is accompanied by volume, it can be strong move.
On the daily candlestick chart, today’s action creates a Hammer. This
formation typically signifies the end of a downtrend, and
a continuation to the upside tomorrow would signal a Haggerty 1-2-3 bottom.
We shall see.
Eddie